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Selling Tobacco Products in Taiwan

Selling Tobacco Products in Taiwan

In order to sell tobacco products in Taiwan, local and foreign businesses have to comply with specific and somehow stringent regulations. Just like in the case of other countries across the world, Taiwan applies numerous legal acts that regulate the manner in which companies can sell and promote tobacco products on the local market.   

Investors who want to open a company in Taiwan have to observe the basic legal requirements that derive from rules of law such as: the Tobacco Hazards Prevention Act, the Regulations for Establishment of Indoor Smoking Rooms or the Regulations for the Administration of the Display and the Labeling of Tobacco Products at Tobacco-Selling Premises; foreign businessmen can request in-depth information and legal advice on the main rules of law from our team of consultants in company registration in Taiwan.   

What are the basic smoking requirements in Taiwan? 

Those who are interested in opening a company in Taiwan that has as a main object of activity the sale of tobacco products should be aware of the main regulations applicable here. For example, smoking in Taiwan is prohibited in indoor places where there are three or more persons at the same time. A set of limitations is also applicable for smoking in public places such as schools, hospital, governmental institutions or universities. The following are also available in Taiwan:   

  • smoking in public transportation vehicles is prohibited (this includes public transportation stations);
  • however, smoking is permitted in specially designated areas in the country’s international airport;
  • as a general rule, the advertising of tobacco products is prohibited;
  • advertising can be used at the point of sale, but specific conditions regarding the size of the display and its location are applicable;
  • when selling tobacco products in Taiwan, the packaging must contain pictorial and text health warnings;
  • these messages have to cover 35% of the package of the tobacco products
  • companies selling tobacco products must use the six authorized pictorial and text warnings.   

What does the term tobacco product refer to in Taiwan? 

When selling tobacco products in this country, it is necessary to know the definition of the term. The term is defined by the Tobacco Hazards Prevention Act, which clearly defines what tobacco products are in this country, but also the means through which sellers and manufacturers can address to their customers.   

It also stipulates the fines that can be applied, provided that the legislation in force is not respected; our team of specialists in company registration in Taiwan can advise on the regulations of the act and may assist businessmen in obtaining the necessary permits for developing this activity here.   

According to the Article 2 of the Act, the term tobacco products refers to cigarettes, cut tobacco, cigars and any other similar products that are made entirely or partly from tobacco. The term does not refer only to using tobacco by smoking, but it also takes into consideration other means of consumption such as chewing.   

What is the current situation on using tobacco in Taiwan?

Although the legislation for the promotion and sale of tobacco and tobacco products limits the possibility of reaching a large consumer market, the Taiwanese market is represented by a constant increase on the production of tobacco products. When referring to the production of tobacco in Taiwan, investors should know that the following apply:  

  • the index of tobacco production in 2008 stood at 64,51, steadily increasing up to 70,34 in 2010;
  • the index increased at a rapid pace for the following year, reaching 78,28;
  • in 2012, it increased at 82,63, while in 2013, it slightly contracted, at 82,11;
  • in 2014 and 2015 the index of production continued its contraction, reaching 81,37 and 81,04 respectively;
  • however, at the level of 2016, the country reached an index of production of 100;
  • in 2017, the latest data shows that the index of tobacco production in Taiwan reached 119,06.   

Another aspect investors opening a company in Taiwan as a tobacco business should consider is the taxation level applicable to this type of activity. Taxes are applicable to both companies producing tobacco products here, but also to imported products. The tax for the sale of cigarettes is of NT$ 1,590 per 1,000 sticks, while in the case of cut tobacco, the same tax applies for each kilogram of tobacco.   

The same tax threshold is available for the sale of cigars and any other types of tobacco products. Businessmen interested in registering a business for the sale of tobacco products in this country are advised to request for legal representation from our team of consultants in company formation in Taiwan.